If the price of aluminum used to make bicycles increases, the price of a bicycle rises because of a

Question

Quizplus · Accepted Answer

An increase in the cost of aluminum (a key input in bicycle production) will cause the supply curve of bicycles to shift leftward, resulting in a decrease in the quantity supplied of bicycles at every price. This decrease in supply will cause the price of bicycles to rise, leading to a movement up along the demand curve for bicycles. Therefore, the correct choice is D, which corresponds to a leftward shift of the supply curve of bicycles.

If the Price of Aluminum Used to Make Bicycles Increases